Vendor Due Diligence, Assistance & Evaluations

Due diligence is one of the most important pieces of third-party vendor risk management. Vendor due diligence refers to the investigation or audit process of potential and current vendors and products. A comprehensive risk management software solution will give you the tools to properly store, track and evaluate all necessary documentation including financial and informational security reviews, control audits, business continuity plans and more.

Importance of due diligence with your risk management.

Due diligence is a critical activity that should be a part of your risk management.  Vendors are not going to openly provide you with information that could be seen as their ‘dirty laundry’ and show them in a negative light.  Due diligence collected on vendors is essentially an analysis performed on their business, finances and information security. Having effective due diligence for all of your vendors can help your organization make solid partnerships with the right vendors.  By performing vendor due diligence evaluations, it will provide a picture of whether the vendor is a risk to your organization by discovering something that may have gone unnoticed. For example, if they are following regulatory expectations, follow industry best practices and if they are the best vendor or if someone else might be better suited to your needs.

Importance of Due Diligence Wwith Your Risk Management

A sufficient third-party or vendor risk management program is not complete without proper vendor due diligence. At any stage of a business relationship, it’s safe to assume most vendors will not openly share their risks and vulnerabilities. Gathering and reviewing vendor due diligence is important for a lot of reasons, but regulatory compliance is most critical. Especially when it comes to your third-party’s vendors, or fourth-parties, many regulators require organizations to identify and monitor the extent of your geographic and concentration risk. 

When you don’t perform vendor due diligence, your organization and its processes suffer. A lack of due diligence not only exposes your organization to a wide-range of risks, but increases the chance you overlook another vendor that could be better suited for your organization. Maintaining vendor due diligence is of course best practices for third-party risk management, but it can also deliver value and insight into the effectiveness of your policies and programs. With proper tracking and reporting you can uncover new risks that would have otherwise been missed.

Types of Vendor Due Diligence

The type of vendor due diligence you perform depends on the stage of your business relationship. Initial due diligence needs to be reviewed during the request for proposal stage, prior to approving and onboarding a new vendor or third party. It’s essential to identify the level of risk a vendor poses to your organization and whether or not they meet your organization’s goals. Having effective due diligence for all your vendors helps your organization make informed decisions, minimize potential risk factors and create solid partnerships.

Ongoing vendor due diligence should be performed continuously even after a vendor has been contracted and onboarded. The frequency of reviews should be based on the vendor or third-party’s quantity and level of risk, but best practices suggest at least once a year, since a number of risks can impact your vendors at any time. The risk posed by each vendor or third-party may be constantly fluctuating and implementing routine evaluations will help you keep a close eye on areas of concern.

What is Vendor Management Policy?

Having a vendor management policy ensures that you have a strong foundation for your third-party vendor risk management program. Vendor due diligence is a crucial step in that foundation. When implemented correctly, it highlights the effectiveness of your current vendor management policies and identifies gaps or areas where more steps are needed. A centralized and flexible solution like VendorInsight®, allows your vendor management policy to be implemented in a formal process for all departments to follow as a consistent company standard. You can create an Oversight and Policy Compliance Dashboard that can be customized or configured based on your current internal policies and due diligence needs. This dashboard will display all of your vendors at a glance and if the internal vendor management policy requirements are met or outstanding.

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​Request a demo today to learn more about how VendorInsight® VRM solution can help you manage your third-party vendor relationships, maintain compliance with regulations and meet your business objective.

Due Diligence as a Complete Risk Suite

VendorInsight® understands the need to quickly perform a comprehensive initial due diligence review of a new vendor. This is why we provide an Onboarding Review Package that includes several vendor reports: OFAC Check, News Search and Risk Alerts, Financial, Control Audit SOC1/SOC2, Information Security, Business Continuity Planning /Disaster Recovery (BCP/DR) Plan and Test Results, Insurance and Compliance Reviews. Additionally, we provide a one-page vendor summary so your project team or leadership can quickly review and approve the vendor or document findings and refer them to remediation. 

Many companies lack the tools and resources needed to continuously complete and keep up with ongoing vendor due diligence reviews and evaluations. A vendor management software solution, like VendorInsight®, streamlines the vendor due diligence process with automated risk assessments, questionnaires, evaluations, workflows, tracking and reporting. Minimize your risk and vulnerability to disruptions with continuous monitoring features like news alerts, social media monitoring and cyber security ratings for all your high-risk vendors. Our partnership with cybersecurity company, NormShield, provides you with a non-intrusive detailed risk rating of your organization and your vendor’s cybersecurity environment. When you have the tools to quickly request and gather due diligence documentation, you’ll have more time to be able to analyze and gain insight.

Other companies may want to outsource the whole process instead and leave it to the experts. In that case, VRM Pro™ is the solution for you! With a seamless integration into VendorInsight®, our experienced vendor management advisors will automate your entire vendor due diligence process. Spend less time gathering vendor due diligence documentation and more time analyzing its impact. We handle all the mundane due diligence tasks you don’t have time or manpower for: requesting documentation and follow ups, performing onboarding and ongoing reviews, preparing reports, completing inherent risk profiles and residual risk assessments, vendor terminations and more! Completing your risk suite with our VendorInsight® and VRM Pro™ solutions will significantly improve your third-party vendor risk management program by eliminating the constraints and gaps you have today.

Vendor Risk Management

Learn more about VendorInsight®

Request a demo today to learn how our third-party vendor risk management solutions like VendorInsight® and VRM Pro™, keeps your organization compliant while providing the flexibility to maintain third-party vendor relationships and meet business objectives.

Schedule a demo today.

​Request a demo today to learn more about how VendorInsight® VRM solution can help you manage your third-party vendor relationships, maintain compliance with regulations and meet your business objective.